Bonus depreciation for Fiscal year taxpayer

[andreawick]

Here's the fact pattern:

C-corp with a 3/31/14 year-end.

Filing a 2013 return.

Assets purchased in March 2014.

Are assets available for Bonus depreciation of 50%, since the company is filing a '13 return?

My initial response is no, but I haven't do any research, yet. Any body want to chime in?

thanks!

[rangerj]

Actually the return is the "14" return as in FYE 03/31/2014. Go to Code section 168(k) and check the "placed in service before" dates. There was, and maybe still is, a January 1, 2014 date for "long production property". I have not looked at this for a while and Congress may or may not have extended the dates, or other rules, for the bonus depreciation. Do the research.

Added Note: you do use the 2013 Forms, but the return is a "14" return.

[andreawick]

I may have left out a key fact.

Company is a trucking company and the assets were trucks.

So 168(k)(2)(A)(iv) - which is placed in service by the taxpayer before Jan 1 '14, or in the case of property described in sub (B) or (C), before Jan 1, 2015.

(B)(iii) Transportation property

I'm reading that the a fiscal year Trucking company can take bonus then for assets bought in '14, as long as they are filing a "2013 Forms" tax return?

[The Captain]

Remember there is a difference between expenditure date and placed in service date.  I think only pre-12/31/13 expenditures qualify for extra bonus depreciation if considering the extended placed-in-service date.

That particular code section is a messy read.  Below is a paragraph form the 2014 Master Tax Guide which explaines it a bit better in English...(the underlines are mine).

"A bonus depreciation deduction is allowed for qualifying MACRS property acquired after December 31, 2007, and before January 1, 2014, if it is placed in service before January 1, 2014. The original use of the qualifying property must begin with the taxpayer after December 31, 2007. Property that is acquired pursuant to a written binding contract entered into after December 31, 2007, and before January 1, 2014, is deemed acquired before January 1, 2014 ( Code Sec. 168(k)). 48

The placed-in-service-deadline is extended one year (before January 1, 2015) for "long production property" that otherwise qualifies for bonus depreciation. Long production property is defined as property that (1) is subject to the Code Sec. 263A uniform capitalization rules, (2) has a production period greater than one year and a cost exceeding $1 million, and (3) has a MACRS recovery period of at least 10 years or is used in the trade or business of transporting persons or property for hire, such as commercial aircraft. However, only pre-January 1, 2014, progress expenditures are taken into account if the extended placed-in-service deadline applies ( Code Sec. 168(k)(2)(B)). The extended placed-in-service deadline also applies to certain noncommercial aircraft acquired by purchase. Unlike commercial aircraft, 2014 progress expenditures on noncommercial aircraft placed in service before January 1, 2015, are eligible for bonus depreciation ( Code Sec. 168(k)(2)(C))."